Two real estate companies are readying shovels to bring 240 micro-units to San Francisco's Tenderloin neighborhood.
Forge Development Partners and Bridge Investment Group will begin construction this month on two ground-up buildings in the area, with 146 units coming to 361 Turk St. and 94 coming to 145 Leavenworth St., according to the companies.
The 240 units will be for renters of various incomes. The developers will reserve 12% for renters earning about $32K per year, and 39% of units will be targeted at renters earning at least $75K per year. Forge and Bridge anticipate the remaining 49% of units being affordable for renters making $82K annually.
The project cost will be $100M.
Affordable housing developer Tenderloin Neighborhood Development Corp. owns a property adjacent to 145 Leavenworth St. and had been advising Forge on their project for the last few years, TNDC Planning and Policy Manager Alexandra Goldman said.
The developers tout the project, called TL 361, as the first newly constructed privately funded workforce housing development in San Francisco. Permanent financing will be provided by a Freddie Mac Multifamily unfunded forward commitment. Construction financing is provided by East West Bank and Washington Federal Bank.
"It's sort of a new model," Goldman said. "Having private resources funding a project with an income cap, but that's a good thing."
The group originally planned to break ground on the project in 2017 and planned for the buildings to be prefabricated in Sacramento with all-union labor. Neither Forge Development Partners nor Bridge Investment Group responded to requests for comment.
Goldman said the TNDC does have a concern of current residents being displaced by future projects that are similar to Forge and Bridge's but aimed more at higher-income people.
"If there's a demonstrated market for SRO-style housing but for higher-income people, it puts pressure on the existing low-income SRO housing stock," she said.
The Tenderloin has hundreds of other units under construction, including Shorenstein's 12-story, 303-unit building coming to 1066 Market St. Forge also has eyes on other micro-unit projects in the gritty San Francisco neighborhood. The developer is working on approval for 138 units at 819 Ellis St., according to the San Francisco Business Times.
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